[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2894 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 2894
To amend the Internal Revenue Code and the Employee Retirement Income
Security Act of 1974 to provide for salary reductions for certain
employees of a pension plan in critical or declining status that
reduces participant benefits, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 28, 2016
Ms. Stabenow (for herself, Mr. Brown, Mr. Peters, Mrs. McCaskill, and
Ms. Klobuchar) introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code and the Employee Retirement Income
Security Act of 1974 to provide for salary reductions for certain
employees of a pension plan in critical or declining status that
reduces participant benefits, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pension Fund Integrity Act of
2016''.
SEC. 2. EXECUTIVE SALARIES.
(a) Amendments to Internal Revenue Code of 1986.--
(1) In general.--Subparagraph (C) of section 432(e)(9) of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new clause:
``(iii) In the case of a systemically
important plan (as defined in subparagraph
(H)(v)(III)), effective on the date the benefit
suspension goes into effect, the annual
compensation of each employee of the plan is
reduced to the lesser of--
``(I) the annual compensation of
the employee for the plan year in which
the benefit suspension is approved
under subparagraph (G) (determined as
of the date of such approval), reduced
by the reduction percentage of so much
of such annual compensation as exceeds
$100,000, or
``(II) the average annual
compensation of the employee for the 3
plan years immediately preceding the
year in which the benefit suspension is
approved under subparagraph (G),
reduced by the reduction percentage of
so much of such average annual
compensation as exceeds $100,000,
and will not be increased (including by means
of a bonus, performance-based compensation, or
otherwise) as long as the benefit suspension
remains in effect. For purposes of the
preceding sentence, the term `reduction
percentage' means the percentage determined by
the Secretary and provided to the plan which is
equal to the average percentage reduction in
benefits applicable to the 50 participants and
beneficiaries who receive the greatest
reduction in benefits under the plan as a
result of the suspension.''.
(2) Tax on prohibited transactions.--
(A) In general.--Paragraph (1) of section 4975(c)
of such Code is amended--
(i) by striking ``or'' at the end of
subparagraph (E),
(ii) by striking the period at the end of
subparagraph (F) and inserting ``; or'', and
(iii) by adding at the end the following
new subparagraph:
``(G) notwithstanding subsection (d)(2), payment by
a systemically important plan (as defined in section
432(e)(9)(H)(v)(III)) of--
``(i) any compensation (including a bonus
or performance-based compensation) in excess of
the amount determined under section
432(e)(9)(C)(iii) to any employee of the plan
with respect to which a benefit suspension is
in effect under section 432(e)(9), or
``(ii) in the case of any nonemployee who
was an employee of the plan during any of the 3
plan years immediately preceding the year in
which the benefit suspension is approved under
section 432(e)(9)(G), any compensation to such
individual (as an independent contractor or
otherwise and including any bonus or
performance-based compensation) in excess of
the amount that would be determined under
section 432(e)(9)(C)(iii) if the individual
were an employee at the time of payment of such
compensation.''.
(B) Liability for tax.--Subsection (a) of section
4975 of such Code is amended by inserting before the
period the following: ``, except that any tax imposed
by this subsection by reason of subsection (c)(1)(G)
shall be paid by the plan sponsor''.
(C) Liability for additional taxes.--Subsection (b)
of section 4975 of such Code is amended by inserting
before the period the following: ``, except that any
tax imposed by this subsection by reason of subsection
(c)(1)(G) shall be paid by the plan sponsor''.
(D) Clerical amendments.--The headings of
subsections (a) and (b) of section 4975 of such Code
are each amended by striking ``on Disqualified
Person''.
(b) Amendments to Employee Retirement Income Security Act of
1974.--
(1) In general.--Subparagraph (C) of section 305(e)(9) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1085(e)(9)(C)) is amended by adding at the end the following
new clause:
``(iii) In the case of a systemically
important plan (as defined in subparagraph
(H)(v)(III)), effective on the date the benefit
suspension goes into effect, the annual
compensation of each employee of the plan is
reduced to the lesser of--
``(I) the annual compensation of
the employee for the plan year in which
the benefit suspension is approved
under subparagraph (G) (determined as
of the date of such approval), reduced
by the reduction percentage of so much
of such annual compensation as exceeds
$100,000, or
``(II) the average annual
compensation of the employee for the 3
plan years immediately preceding the
year in which the benefit suspension is
approved under subparagraph (G),
reduced by the reduction percentage of
so much of such average annual
compensation as exceeds $100,000,
and will not be increased (including by means
of a bonus, performance-based compensation, or
otherwise) as long as the benefit suspension
remains in effect. For purposes of the
preceding sentence, the term `reduction
percentage' means the percentage determined by
the Secretary of the Treasury and provided to
the plan which is equal to the average
percentage reduction in benefits applicable to
the 50 participants and beneficiaries who
receive the greatest reduction in benefits
under the plan as a result of the
suspension.''.
(2) Prohibited transactions.--Paragraph (1) of section
406(a) of such Act (29 U.S.C. 1106(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph
(D),
(B) by striking the period at the end of
subparagraph (E) and inserting ``; or'', and
(C) by adding at the end the following new
subparagraph:
``(F) notwithstanding section 408(b)(2), payment by
a systemically important plan (as defined in section
305(e)(9)(H)(v)(III)) of--
``(i) any compensation (including a bonus
or performance-based compensation) in excess of
the amount determined under section
305(e)(9)(C)(iii) to any employee of the plan
with respect to which a benefit suspension is
in effect under section 305(e)(9), or
``(ii) in the case of any nonemployee who
was an employee of the plan during any of the 3
plan years immediately preceding the year in
which the benefit suspension is approved under
section 305(e)(9)(G), any compensation to such
individual (as an independent contractor or
otherwise and including any bonus or
performance-based compensation) in excess of
the amount that would be determined under
section 305(e)(9)(C)(iii) if the individual
were an employee at the time of payment of such
compensation.''.
(c) Effective Dates.--
(1) In general.--The amendments made by subsections (a)(1)
and (b)(1) shall apply to suspensions of benefits under section
432(e)(9)(G) of the Internal Revenue Code of 1986 and section
305(e)(9)(G) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1085(e)(9)(G)) which take effect after the date
of the enactment of this Act.
(2) Prohibited transactions.--The amendments made by
subsections (a)(2), (b)(2), and (b)(3) shall apply to any
transaction made after the date of the enactment of this Act.
SEC. 3. PROHIBITION OF LOBBYING EXPENSES.
(a) Amendments to Internal Revenue Code of 1986.--
(1) In general.--Paragraph (1) of section 4975(c) of the
Internal Revenue Code of 1986, as amended by section 1(a), is
amended--
(A) by striking ``or'' at the end of subparagraph
(F),
(B) by striking the period at the end of
subparagraph (G) and inserting ``; or'', and
(C) by adding at the end the following new
subparagraph:
``(H) payment by the plan of any amount for the
engagement of any person other than an employee of the
plan in connection with any activity described in
section 162(e)(1) during any period in which the plan
is in endangered status under section 432(b)(1), in
critical status under section 432(b)(2), or in critical
and declining status under section 432(b)(6).''.
(2) Liability of plan sponsor.--Subsections (a) and (b) of
section 4975 of such Code, as amended by section 1(a), are each
amended by striking ``subsection (c)(1)(G)'' and inserting
``subparagraph (G) or (H) of subsection (c)(1)''.
(b) Amendments to Employee Retirement Income Security Act of
1974.--
(1) In general.--Paragraph (1) of section 406(a) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1106(a)(1)), as amended by section 1(b), is amended--
(A) by striking ``or'' at the end of subparagraph
(E),
(B) by striking the period at the end of
subparagraph (F) and inserting ``; or'', and
(C) by adding at the end the following new
subparagraph:
``(G) payment by the plan of any amount for the
engagement of any person other than an employee of the
plan in connection with any activity described in
section 162(e)(1) of the Internal Revenue Code of 1986
during any period in which the plan is in endangered
status under section 305(b)(1), in critical status
under section 305(b)(2), or in critical and declining
status under section 305(b)(6).''.
(2) Liability of plan sponsor.--Subsection (c) of section
409 of such Act (29 U.S.C. 1109(c)), as added by section 1(b),
is amended by striking ``4975(c)(1)(G)'' and inserting
``subparagraph (G) or (H) of section 4975(c)(1)''.
(c) Effective Date.--The amendments made by this section shall
apply to transactions made after the date of the enactment of this Act.
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